CFG Token Design Idea

Hi All, just want to share a quick idea on the token model for CFG. There was a post from MultiCoin capital recently, talking about how coins that insure/backstop risk have greater ability to accrue intrinsic value. For example, DyDx, Perpetual swap, and Maker, all backstop risk on one form or another – which give their tokens good claim on cash flows.

My idea about how Centrifuge CFG could integrate a mechanism like this would be to provide insurance against credit risk of pools. Perhaps any CFG holder could “stake” CFG on pools and, if the TIN tranche fails, the stake is slashed. Conversely, if there aren’t losses to DROP, new CFG could be rewarded in-kind to the staker.

This model wouldn’t drive cash flows to all CFG tokenholders. But for holders of CFG who want to write insurance by staking on pools, there would be upside potential. This could create a business around buying CFG for staking, which would indirectly benefit all CFG holders.

I’m sure there are some weaknesses/risks with something like this, but perhaps it helps!

Great work all,


I love the idea! Provides additional utility and seems feasible to implement. Would be a great feature for Altair as well :+1:

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yes. ty!

we already thought about it some time ago. maybe you had a chance to check the earlier versions of our white paper :wink:

we think it makes sense when the protocol got a few more features like the underwriter token, entirely moved to our mainnet, and TVL is bigger. it needs some governance and combined with the securitization we offer as a core feature (which is already an insurance/risk mitigation for the senior investors) more work than just mint/burn of CFG.

please keep going with sharing such great ideas. thanks a million!